Looking for an investment

dont_use_vistaprint

I'm looking for something with a track record & good future potential to grow or yield around 5-6% annually over 5-10 years , monthly volatility is fine ,   low risk but some risk of underperforming but not  more than 1% below BoE interest rates and very resilient to a tech sector crash, with reasonable  good resilience to an overall global crash.

does such a thing exist and where should I be looking? Or would I need to build it myself in a pie 

thanks 

masonic

The gilt T4Q could be bought for a guaranteed ~4.6% over 10 years if held to maturity. Selling it before would lead to a better or worse outcome, with the uncertainty reducing to nothing the closer you get. To achieve an extra 1%, without sacrificing more than 1% due to capital risk, you could look to combine with a small measure of high yield corporate bonds, REITs or infrastructure, but I'd question whether it was worth the gamble over the short-medium term.

If there was another spike in inflation in a few years time, would that be a problem for you?

aroominyork

You don't want volatility so equities are out of the question. That leaves fixed interest, and if you want to protect against volatility and interest rate changes you want short duration. I would hunt around short duration corporate/strategic bond funds - something like Artemis Short-Duration Strategic Bond might be close enough for you, but if asked the manager if he can assure you of 5-6% over 5-10 years he will give you plenty of reasons why he cannot. (masonic posted while I was typing and his reply is of course better than mine.)

Ayr_Rage

Look at the larger Investment Trusts, +41.65% over 5 years and quarterly dividends.

aroominyork

Alliance Witan is 100% equities and yields about 2%. That doesn't tick any of the OP's boxes.

masonic

Ayr_Rage said:

Look at the larger Investment Trusts, +41.65% over 5 years and quarterly dividends.

A total return of 60% over the last 5 years, which is a 9.6% annualised return, in line with it's long term return, so looks great.

However, one must consider performance over other 5 year periods...

(all charts are performance including reinvested dividends)

Newbie_John

Royal London has quite a lot of funds that aim at that range.
From most typical like short term money market, through fixed income, fixed income enhanced, variety of short duration credits, sustainable, global yields etc.

Quite a lot to choose from returning 4-10% a year depending on risk, but the last 3 years were very stable.

Ayr_Rage

aroominyork said:

Alliance Witan is 100% equities and yields about 2%. That doesn't tick any of the OP's boxes.

The OP said the following

"good future potential to grow or yield around 5-6% annually over 5-10 years"

So kindly explain your reasoning as to why ALW didn't fulfil the growth element over the last 5 years, and as you say they also paid a dividend yield of 2% or so.

masonic

Ayr_Rage said:

aroominyork said:

Alliance Witan is 100% equities and yields about 2%. That doesn't tick any of the OP's boxes.

The OP said the following

"good future potential to grow or yield around 5-6% annually over 5-10 years"

So kindly explain your reasoning as to why ALW didn't fulfil the growth element over the last 5 years, and as you say they also paid a dividend yield of 2% or so.

@aroominyork probably also noticed "low risk but some risk of underperforming but not more than 1% below BoE interest rates and very resilient to a tech sector crash, with reasonable - good resilience to an overall global crash". Maybe you missed that?

I do not think a 40% loss potential is low risk, or would allow the condition of a return "not more than 1% below BoE interest rate" to be met should there be a tech sector or overall global crash.

jimjames

masonic said:

Ayr_Rage said:

Look at the larger Investment Trusts, +41.65% over 5 years and quarterly dividends.

A total return of 60% over the last 5 years, which is a 9.6% annualised return, in line with it's long term return, so looks great. However, one must consider performance over other 5 year periods...

Although as I understand it the management process has changed significantly over the last few years so historic performance is unlikely to be as a result of the same team as now. I agree it's not what you'd call low risk though.

masonic

jimjames said:

masonic said:

Ayr_Rage said:

Look at the larger Investment Trusts, +41.65% over 5 years and quarterly dividends.

A total return of 60% over the last 5 years, which is a 9.6% annualised return, in line with it's long term return, so looks great. However, one must consider performance over other 5 year periods...

Although as I understand it the management process has changed significantly over the last few years so historic performance is unlikely to be as a result of the same team as now. I agree it's not what you'd call low risk though.

That's fair comment. Looking at more recent signals, it fell 20% peak to trough in the Trump tariff correction last year compared with 17% for the FTSE All World index and 22% for the Global Investment Trust sector average. That suggests it is not positioned particularly defensively and as an IT there is a risk of a widening discount over and above the NAV change in a more prolonged event. It has dialled down US tech a little, but still has 3 of the mag 7 in its top 10. Lowish cost and not a bad way to balance exposure in a high risk equity portfolio, but a recommendation for a different problem than the OP has.